T Nation

McCain/Obama and Economy

This was a post and my response from another thread.

I’d like to use this thread to discuss the approach of each to the economy: 1) Is it even the role of the President to be responsible for the economy beyond signing the budget, 2) What are the approaches of each candidate and why will it help?

Original post:

[quote]beebuddy wrote:

I am not anti-McCain, though I strongly dislike the idea of Palin being president, and this year my vote is going to be based completely on who I agree with economically.

[/quote]

My response:
[i]
This is a fascinating statement to me-- worthy of another thread.

I honestly can’t figure out how people are ‘on the fence’ about these two candidates beyond that they are both politicians who’s only goal is to be President.

I truly believe that if I’m going to subsidize public schools with my (over) taxed paycheck, Economics and History should be taught from Day 1 until the day they graduate.
[/i]

1.) I don’t think you are intentionally marginalizing the budget, but keep in mind that signing budgets is a HUGE way the president affects the economy.

From what I understand, McCain wants to promote Reaganomics, which has it’s place, and Obama wants to cut tons of stuff from the budget and then spend that on tax-cuts for “green-energy” and use the rest on building infrastructure like a typical Keynesian. Oh and he wants to tax the living hell out of the rich I think. I’d like to see there platforms. That is just my guess, they are being intentionally vague because they can’t say who is getting cut out of the budget before they are elected.

Anyway, fire away gentlemen. Post some links even…

Not at all! The budget is a huge factor. I’d personally like to see the President go through tons of Veto pens.

I don’t believe in ‘taxing our way to prosperity’. It’s a historical proven failure. The ‘rich’ already pay most of the taxes.

If Obama has spoken about cutting anytning out of the budget, I haven’t heard it. I’m all for cutting spending. But like Steely said, the rich already bear most of the tax burden, so Obama’s “Fuck the Rich” strategy doesn’t play with me at all (and I’m dirt poor, btw). I don’t play the class envy game.

All I want is for the government to let me keep more of my money, I don’t need them playing Robin Hood on my behalf. Once you get taxes up so high on those damn dirty rich folk, you’ve gone beyond fair into just plain punishing them for being successful. That’s not the country I want. At all.

Both are completely ignorant on sound economic principles.

BHO wants to cut some spending and spend it somewhere else; that’s not economics that’s politics. BHO will punish wealth creation and there will be less wealth because of it.

McCain wants to “cut taxes” but continue to spend money abroad on the Empire which means more inflation and debt. McCain will punish the middle class and expand the poverty level.

[quote]SteelyD wrote:
Not at all! The budget is a huge factor. I’d personally like to see the President go through tons of Veto pens.

I don’t believe in ‘taxing our way to prosperity’. It’s a historical proven failure. The ‘rich’ already pay most of the taxes.[/quote]

Well, it’s turning into a name game now, which annoys me. My friend and were talking last night about how repealing a tax-cut has the same result as adding a tax. So when the politicians use one word or the other they are trying seem blameless and point fingers elsewhere.

But we differ on that. My view is that we need to start taxing more in order to pay for this godforsaken war we are in, cut spending wherever reasonably possible, and hopefully have enough left over to offer tax-breaks to people like T.Boone Pickens who have a vision that they’d like to see fulfilled.

The other companies seem to be lacking that vision right now. And I think that there is a strong consensus in the country that we need to start building a non-carbon based economy. The hippies want it because they believe CO2 causes the earth to explode, or something, and rational people want it so we can 1. Cease dealings with governments whose entire citizenry hates us, and 2. Keep more of the billions we send out into the world economy everyday for oil. Then there’s universal appeal of energy independence, especially when that involves renewable energy.

But this money has to come from somewhere, and frankly, if they aren’t going to get on the new-energy bandwagon I see no reason to continue offering tax breaks to energy companies.

Anyway, I’ve been with the Republicans on drilling if only to force the oil market to correct itself. We don’t even need to drill a single drop and we’re already seeing the futures market respond to Bush’s removal of the executive offshore ban. It’s about time Peelosi opened this up for debate. I think the number of people hit by high oil prices far outweigh the stoners and nutters that don’t want to drill for oil for whatever reason.

[quote]MrRezister wrote:
If Obama has spoken about cutting anytning out of the budget, I haven’t heard it. I’m all for cutting spending. But like Steely said, the rich already bear most of the tax burden, so Obama’s “Fuck the Rich” strategy doesn’t play with me at all (and I’m dirt poor, btw). I don’t play the class envy game.

All I want is for the government to let me keep more of my money, I don’t need them playing Robin Hood on my behalf. Once you get taxes up so high on those damn dirty rich folk, you’ve gone beyond fair into just plain punishing them for being successful. That’s not the country I want. At all.[/quote]

He hasn’t revealed what will be cut, neither has McCain. They can’t talk about that until after they are elected because they will both end up burning their some of their current supporters.

Nobody like taxes, but we have to pay our debts somehow!

[quote]LIFTICVSMAXIMVS wrote:
Both are completely ignorant on sound economic principles.

BHO wants to cut some spending and spend it somewhere else; that’s not economics that’s politics. BHO will punish wealth creation and there will be less wealth because of it.

McCain wants to “cut taxes” but continue to spend money abroad on the Empire which means more inflation and debt. McCain will punish the middle class and expand the poverty level.[/quote]

I agree with what you wrote, but I’m looking at it a little differently. I took one anthropology course a long time ago, and it sucked… But that is neither here, nor there. One thing that stuck in my mind is that almost universally ‘Big Men’ who appropriate other people’s property to the point of amassing an uber-surplus (basically a tax) are obligated to help out people that have a bad year with crops. They are also obligated to throw big ass parties with all of the tax they collect. Sometimes these parties would be based on building a hut or a bridge or whatever.

So we kind of have two Big Men, the uber-rich and the government. At some point the shift from amassing wealth to giving it out happens or the public becomes dissatisfied.

But I’m curious what, within the spectrum of what he would actually do, could BHO do to help create wealth?

[quote]beebuddy wrote:
But I’m curious what, within the spectrum of what he would actually do, could BHO do to help create wealth?[/quote]

Nothing he does would help in the long run. What needs to happen:
cut taxes and spend less. This in itself would be enough to sustain wealth creation in a positive direction. More wealth means more voluntary wealth redistribution.

The second thing is to pay down the debt and remove the fractional credit from the system (amounts to 90% of all credit). This would increase the purchasing power of the dollar in the long run and people would feel more wealthy even if they were to have the same amount of money in their savings accounts.

Finally and ultimately, legalizing competition among currency and eliminating the Federal Reserve needs to happen in gradual steps. The centralized and fractional reserve systems of banking are unneeded and counterproductive to the ideas of liberty.

[quote]LIFTICVSMAXIMVS wrote:
Nothing he does would help in the long run. What needs to happen: cut taxes and spend less. This in itself would be enough to sustain wealth creation in a positive direction. More wealth means more voluntary wealth redistribution.
[/quote]

This is an absolutely important statement that BOTH need to happen. Someone has to accept some cuts somewhere. We don’t need any more new taxes/fees. It’s been proven time and time again that tax cuts especially in the corporate sectore increases gov’t revenue.

The problem with Blind Class Warfare and Corporate Hate is that it’s akin to shooting oneself in the foot. Sure, tax the Hell out of big companies, they don’t care, they simply raise prices or move production/resources offshore. The only people who suffer are downstream. Always.

Tax me more? I spend less. Tax me here? I go to the state next door.

Here in The People’s Republic of Maine, where Nanny rules, politicians tried to hike ‘sin’ taxes on cigarettes (and now sodas and alcohol) in the guise of ‘health concerns’. Really to boost revenue. Cigs went up on the order of dollars (I don’t smoke, btw).

Guess what? Statistically, there was an increase in Smoking!!

Guess what else? REVENUES WENT DOWN!!

How’s that? Well, it turns out next door on the other side of “The Maple Curtain”, New Hampshire is one of the most consumer friendly places in the country-- folks simply drive next door, buy cigs and fill their tanks with gasoline. Oh, did I mention that MaineDOT is suffering from revenue losses because of a gas-tax hike?

People wisen up pretty quick when you start hitting them in the wallet. Even the more liberal folks are fed up with the taxers they voted for.

Oh, Maine has the 2nd worse economy in the country behind Louisiana, and they had Katrina. We’re also the highest, or nearly highest taxed state in the country (any given year).

Taxes suck.

[quote]SteelyD wrote:
Not at all! The budget is a huge factor. I’d personally like to see the President go through tons of Veto pens.

I don’t believe in ‘taxing our way to prosperity’. It’s a historical proven failure. The ‘rich’ already pay most of the taxes.[/quote]

We are definitely on the same page here.

I am no macro economic wiz by any means, but I really fear it may too late.

The bureaucracy is swallowing up the private sector, literally, as we speak.

The fact there are people in large enough numbers to fuel an Obama candidacy which means they believe EVEN MORE bureaucracy is the answer (or they’re gullible morons), does not instill confidence in me for our future.

Taxes are by their very nature an increase in federal power. Anybody who believes that Obamanomics will result in a stronger economy is an idiot, plain and simple. The USSR collapses, China is improving only in direct proportion to the degree to which they emulate our capitalism, the other marxist outposts around the world are a loud grotesque disaster and what do we do? We move in the direction that is the underlying cause of all that failure while still claiming those states as enemies.

It is national schizophrenic suicide. If we keep it up the Bin Ladens of the world will chuckle and mock as we destroy ourselves.

It’s pitiful. The Dems have moved left enough to be outside our borders altogether and the GOP, right on their heels, is far to the left of where the Dems were 40 years ago.

“nat’l schizophrenic suicide” lol Tirib. funny and sad.

I’d really like to hear Damici weigh in on this topic. Personally I think cutting both taxes and spending is the way to go. The problem, of course, is that people don’t want to accept the cuts that are going to, and need to, happen in social programs in order to ensure the long term health of the nation and budget. Short term thinking.

The revenue stream WILL decrease in the short term as a result of cutting taxes. However, as the market picks up revenue will jump ahead of where it was before. The problem is the lag time. No one wants to think about it, they want results NOW.

Cut taxes and spending and then restructure what’s left to help pay down the deficit. This means a lot of programs are going to take bit hits, but it’s short term pain for long term gain.

[quote]SteelyD wrote:
<<< A buncha good stuff >>>
[/quote]

In other words Reaganomics work.

We need to make up our minds whether we want an anti American public economy or an American private one and just be done with it already. If the former then it’s over. Our days are numbered. If the latter, then neither party is the answer in their present incarnations.

This frankenstein monstrosity we’ve built by trying to have both is a resounding disaster.

The more anti constitutional imaginary powers we bestow on DC the further into the abyss we slip.

I keep saying this, but if we let this Obama guy near the courts you can pretty much kiss whatever private property rights we have left right out the window. That cannot be overstated. Even a backlash in the wake of the destruction reaped by a President Obama would not repair the damage he will inflict on the courts with lifetime appointments.

Another cog in the neo marxist machine that is now the Democrat party and one more nail or three in the coffin of our economy.

[quote]Tiribulus wrote:

It’s pitiful. The Dems have moved left enough to be outside our borders altogether and the GOP, right on their heels, is far to the left of where the Dems were 40 years ago.
[/quote]

I’m glad that point wasn’t lost on you. Notice I included “History” in the original post. The old saying about history, not knowing it, and repeating has been true throughout the ages.

[quote]SteelyD wrote:
Tiribulus wrote:

It’s pitiful. The Dems have moved left enough to be outside our borders altogether and the GOP, right on their heels, is far to the left of where the Dems were 40 years ago.

I’m glad that point wasn’t lost on you. Notice I included “History” in the original post. The old saying about history, not knowing it, and repeating has been true throughout the ages.

[/quote]

If people nowadays were to read JFK on American economics without you telling them they were reading JFK they’d laugh it off as “poor ol senile Ronny, pushing that tired trickle down voodoo economics again”.

He would be aghast in wide eyed shock at what had become of his party on this front if we could bring the JFK of 1963 back to see it.

[quote]LIFTICVSMAXIMVS wrote:

Finally and ultimately, legalizing competition among currency and eliminating the Federal Reserve needs to happen in gradual steps. The centralized and fractional reserve systems of banking are unneeded and counterproductive to the ideas of liberty.[/quote]

I’m still getting my head wrapped around fractional credit at the moment, so don’t go anywhere… But I have to ask now, is legalizing competition among currency a fancy way of saying ‘legalizing barter?’ Or are you actually talking about accepting foreign currencies in business/personal/retail transactions etc…?

Strong Words

[quote]John Fitzgerald Kennedy said the New York Econimics Club in 1963:
“It is a paradoxical truth that tax rates are too high today and tax revenues are too low. . . . An economy constrained by high tax rates will never produce enough revenue to balance the budget, just as it will never create enough jobs or enough profits.”[/quote]

I feel Obama is probably more fiscally conservative than he lets on. He has a lot of University of Chicago people as advisors. That group is very fiscally conservative. I think he might be talking a good game about taxing the rich with little chance of it actually inacting legislation to that point. Also, in his voting record he has shown a bent towards letting the market rule.

Lets not get this confused though. This guy is very socially liberal, I think fiscally he has a more conservative bent.

The thing that gets me about this whole election is up until the Palin nomination I was thinking we really had a choice between two solid canidates instead of choosing the lesser of two evils. Palin just sideswiped everything. So now instead of talking about legit issues, like we are here, we are talking about lipstick–fuckin please… Nominating her was a really chicken shit move to distract people.

[quote]beebuddy wrote:
LIFTICVSMAXIMVS wrote:

Finally and ultimately, legalizing competition among currency and eliminating the Federal Reserve needs to happen in gradual steps. The centralized and fractional reserve systems of banking are unneeded and counterproductive to the ideas of liberty.

I’m still getting my head wrapped around fractional credit at the moment, so don’t go anywhere… But I have to ask now, is legalizing competition among currency a fancy way of saying ‘legalizing barter?’ Or are you actually talking about accepting foreign currencies in business/personal/retail transactions etc…?[/quote]

In it’s most basic form that is exactly what it is. The reason why I say it needs to be legalized is that the gov’t gets upset if they cannot collect taxes on all exchanges. But why, for example, can I not exchange an MP3 player for an iphone if I could find an iphone-holding MP3-player-wanter?

Any party should be able to voluntarily accepts anything as payment. What would happen is that there would ultimately become a commodity (such as precious metals) that would come to be known as the trusted money. Historically this is how it has always happened. Money must exists as a real exchangeable commodity in the market first.

Read The Mystery of Banking, by Murray Rothbard for an understanding of fractional reserve banking. It also gives an explanation of monetary theory.

[quote]LIFTICVSMAXIMVS wrote:

Any party should be able to voluntarily accepts anything as payment. What would happen is that there would ultimately become a commodity (such as precious metals) that would come to be known as the trusted money. Historically this is how it has always happened. Money must exists as a real exchangeable commodity in the market first.[/quote]

But this system became outmoded after the industrial revolution took hold because wealth could be created more easily than gold could be found etc… So in other words, historically that system became obsolete. Spain’s defeat by the British Navy is a perfect example of this.

Anyway, feel free to address that comment, but until I am more confident about what you are saying in your middle paragraph I don’t want to make a longer argument. I studied trade and my finance/banking skills need to be upgraded here… Thanks for the link.